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omfg you do not get 3% interest on your checking account
Most interest-bearing checking accounts get half of a percent annual percentage yield or less. Keep in mind these general require minimum balances in the $5,000 to $10,000 range or you have to pay a monthly fee (which is how they finance the interest they pay out to other account holders).
An excellent savings account will get 0.75%.
A good Certificate of Deposit bears about 4.5%. During the high times of 2000, the best I ever saw was a 6.6% CD with a 5-year term, which means you can't touch your money except in a short window (a few days) every 5 years without suffering a huge fee.
As a rule of thumb, if you can get 5% on a low-risk investment, go for it. If you can get 10% in stocks, hell yes. Even savings accounts are worth investing in to some degree, because of their liquidity.
It's all in how you put your portfolio together. To greatly oversimplify, young professionals (like most of us) should have a portfolio consisting mostly of stocks (majority mutual funds plus some individual-interest stocks, like tech stocks), some bonds, and a savings account to build up a nest egg. I prefer multiple savings accounts: one for a car, one for a house, one for emergencies, etc...(not that I actually have all of those).
So, tell me where you're getting these interest rates and I will not only open an account with them, but I will, in fact, eat my socks after my sister bears a monkey child.
An excellent savings account will get 0.75%.
A good Certificate of Deposit bears about 4.5%. During the high times of 2000, the best I ever saw was a 6.6% CD with a 5-year term, which means you can't touch your money except in a short window (a few days) every 5 years without suffering a huge fee.
As a rule of thumb, if you can get 5% on a low-risk investment, go for it. If you can get 10% in stocks, hell yes. Even savings accounts are worth investing in to some degree, because of their liquidity.
It's all in how you put your portfolio together. To greatly oversimplify, young professionals (like most of us) should have a portfolio consisting mostly of stocks (majority mutual funds plus some individual-interest stocks, like tech stocks), some bonds, and a savings account to build up a nest egg. I prefer multiple savings accounts: one for a car, one for a house, one for emergencies, etc...(not that I actually have all of those).
So, tell me where you're getting these interest rates and I will not only open an account with them, but I will, in fact, eat my socks after my sister bears a monkey child.
Comments
http://www.hvfcu.org/rt/rt_xpandos.cfm?chart=depositRates
At the hudson valley federal credit union you do indeed get interest on your checking account, But you'll get one half of a percent. Not 3%.
However, the orange savings account from http://www.ing.com earns a 4.75% APY. That's pretty typical for good savings accounts these days.
As for the rest, I like to keep my money. Investing is for people who plan to live in a condo in Florida and play shuffleboard while they wait to die.
So ph33r ^_^
(Not that it matters to me. I'm with Scott in terms of investment.)
I use it since I can freely transfer between checking/savings and pay credit card online. I transfer extra cash from paychecks into savings, spend it all on credit card then pay off credit card before it charges any interest ^_^